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While we successfully defend employers in litigation, our goal is to put you in the best possible position before a charge or lawsuit is filed. This may involve a five-minute phone conversation about how to handle a disciplinary meeting with an employee or hours of planning for a nationwide workforce reduction.

Maslon's Labor & Employment Team has worked with employers to develop and update employment policies and policy manuals that communicate your philosophy and mission to your employees and ensure compliance with the law. We have conducted extensive training for our employers in a host of areas. We handle calls every day from clients all over the country, providing instant feedback and advice to managers and supervisors with questions regarding every imaginable issue, including labor relations, drug testing, wage and hour issues, complaints of harassment, discrimination, and immigration issues.

Our lawyers serve as counselors, negotiators, drafters, and litigators, depending upon the involvement the employer desires. We have helped employers plan and implement large-scale workforce reductions and advised employers regarding issues involved in an individual termination. Before terminating employees, employers frequently ask us to review their decisions, advise them of the possible risks, and make suggestions to minimize their risks. We draft separation and release agreements which detail the terms of an employee's departure and ensure that the employee has provided the employer with a legally valid and enforceable release of claims in the particular jurisdiction involved.

We strive to minimize your risks by counseling you prior to implementing business plans or actions that affect employees. We counsel you regarding the practical impact of new and existing laws and help you develop and implement policies and procedures to minimize exposure to costly legal claims. We conduct workplace audits to ensure your compliance with the law. We advise employers about the labor and employment issues that can arise in corporate transactions and restructurings.

The breadth of our experience spans the following areas:

Employee Discipline and Termination

Investigation (e.g., Sexual Harassment, Employee Theft)

Audits (OFCCP, Wage and Hour, etc.)

Training

Policies and Handbooks

Employee Benefits/ERISA

]]>en-usSun, 07 Jun 2020 08:35:39 Zhttps://www.maslon.com/covid-19-legal-updates-critical-business-considerations-1
The Coronavirus (COVID-19) pandemic is dramatically impacting business operations across the United States and around the world. The below timely legal alerts, presentations, and other helpful content are provided to inform and support your consideration of the critical issues, and will be updated accordingly as the situation evolves. Please contact us with your questions or to discuss related concerns at this time. We are here to help!

Minnesota Wills For Heroes: To ensure the Minnesota State Bar Association's Minnesota Wills for Heroes program (WFH) continues to address the needs of our first responders—particularly as they work in the front lines of the Covid-19 crisis—Maslon Estate Planning Attorney Susan Link and colleague Andrea Bischoff have transitioned the operation to virtual services. As Program Directors for WFH, their mutual dedication and coordinated effort with attorney volunteers helps further the program's mission to provide quality, no-cost estate-planning services to the families of the state's first responders—EMTs, police, firefighters and more—who daily risk their lives to help others. Proudly, the WFH Foundation has now granted permission to expand the program to include health care workers during this time of crisis. + LEARN MORE

]]>Sun, 31 May 2020 00:00:00 Zhttps://www.maslon.com/addressing-employee-fears-legal-implications-when-employees-refuse-to-return-to-work
As stay-at-home orders lift in Minnesota and across the country, employers preparing to open their workplaces may face resistance from employees afraid to return to work. This legal alert highlights key legal points for employers to consider in this situation, incorporating the Equal Employment Opportunity Commission's ("EEOC") latest guidance on the Americans with Disabilities Act ("ADA").

Start With A Conversation With The Employee: Identify All the Ways In Which the Employer Has Followed Workplace Safety Guidance from the CDC, OSHA, and State and Local Authorities.

The number one thing employers can do to assuage employee fears is to assure employees that they are taking reasonable measures to keep employees safe and to reduce the risk of COVID-19 transmission in the workplace. In the ever-changing COVID-19 environment, employers should continue to stay up-to-date on public health guidance regarding COVID-19 workplace safety.

Employers should also pay attention to all industry-specific recommendations from the federal Occupational Safety and Health Agency (OSHA), as well as follow any state or local guidelines for reopening. OSHA and CDC safety standards may vary based upon the industry, OSHA's designated risk exposure level for the business, and whether the business is in a "critical sector."

Minnesota currently requires non-critical businesses to create a "COVID-19 Preparedness Plan" before reopening to comply with certain workplace protocols and protections.

Takeaway: Employers should ensure their workplaces comply with the complex framework of federal, state and local COVID-19-related workplace safety guidance. Workplace safety is not a one-size-fits-all solution–the recommended safety measures will vary based on a number of factors, including industry and sector. If an employee is afraid to come to work, the employer should start with a conversation highlighting the workplace safety measures implemented to protect the employee and discussing specific concerns that the employee may have about the workplace.

Under OSHA, An Employee's Refusal To Work Is Not Protected Based On A Generalized Fear Of Contracting COVID-19.

A generalized fear of returning to work due to the COVID-19 pandemic, with nothing more, is not enough to excuse an employee from work. However, OSHA does protect employees from discrimination or retaliation for refusing to work if:

The employee has a good faith belief that an imminent danger exists and that belief has been communicated to the employer;

A reasonable person would agree that there is a real danger of death or serious injury; and,

There is no time to correct the hazard through regular enforcement channels such as an OSHA inspection.

This inquiry is very fact-specific, and will focus on imminence of the danger under all of the circumstances and the reasonableness of the employee's belief.

Takeaway: After reviewing with the employee all measures taken to follow the CDC's and OSHA's recommendations for the workplace, employers should assess whether the employee has a reasonable and specific workplace safety concern and whether there are additional safety measures that could be implemented to address it. In addition to considering how to legally handle an employee's refusal to work, employers may want to also consider goals they have for employee retention when managing employees who have a genuine fear of contracting COVID-19 in the workplace.

Maslon's Labor and Employment Group is available to help you assess whether an employee's concern is reasonable and whether additional safety measures could be taken. We can work with you to identify creative ways to maintain a productive workforce during this time.

Employers Cannot Discipline or Retaliate Against Employees Who Voice Concern Over Working Conditions Related To COVID-19.

The Federal and Minnesota OSH Acts prohibit employers from taking adverse action against employees who have a reasonable belief their workplace is not safe and make a good faith complaint. A reasonable belief means that under the circumstances, a reasonable person would believe they are at risk. Minnesota Governor Walz, in Executive Order 20-54, emphasized that employees are protected from retaliation and discrimination for communicating, orally or in writing, with management personnel about occupational safety or health matters related to COVID-19. According to the Order, this encompasses more than complaints, it also includes employees just asking questions or expressing concerns.

Additionally, the NLRA protects employees, even non-union employees, who engage in "concerted activity for mutual aid or protection." Thus, an employer may be restricted in disciplining or discharging employees who are acting together to protest working conditions. For instance, if two employees reasonably refuse to work because there is insufficient legally-required personal protective equipment, indicating that they are acting on behalf of themselves and others, generally an employer may not discipline the employees.

Takeaway: Employees who are afraid to return to work have a right to ask questions and complain about perceived safety issues in their workplace. However, this fear must be reasonable in order to trigger any legal protections against discipline or discharge for refusing to work.

Employees May be Entitled to Reasonable Accommodations Under the Americans with Disabilities Act (ADA) and State Law.

An employee with a disability may be entitled to a reasonable accommodation under the ADA or parallel state laws, such as the Minnesota Human Rights Act (MHRA). A generalized fear does not amount to a disability under the ADA (or state laws such as the MHRA). Keep in mind though that a fear of COVID-19 in the workplace might be a symptom of a covered disability, such as an anxiety disorder.

The EEOC has issued specific guidance to address employees who have one of the medical conditions that the CDC says may put the individual at a higher risk for severe illness from COVID-19. Employers should continue to monitor guidance from the CDC, state and local health departments, and state or local stay-at-home orders for guidance on the medical conditions that may place individuals at a higher risk for severe illness from COVID-19.

For a reasonable accommodation under the ADA (or MHRA), employees must first request a reasonable accommodation:

An employer's duty to provide a reasonable accommodation under the ADA is triggered by an employee request for a reasonable accommodation:

An employee or a third party, such as the employee's doctor, must inform the employer that the employee needs a change related to a medical condition.

The employee need not use the term "reasonable accommodation" or reference the ADA.

The request for an accommodation can be made orally or in writing.

There are no magic words required to request an accommodation. If an employee requests to work from home, or to take a leave of absence, and the employee informs the employer that they have a medical condition that places them at higher risk for severe illness from COVID-19, that is likely enough to trigger the employer's obligation to begin the accommodation request process. (Note: in some circumstances, such employees may be eligible for two weeks of Emergency Paid Sick Leave under the FFCRA. For example, if the employee has also been advised by a health care provider to self-quarantine due to concerns related to COVID-19.)

If an employee has a medical condition that places them at higher risk for severe illness if they get COVID-19, but the employee does not request an accommodation, the employer does not have to take any action. The EEOC has made clear that employers are prohibited from excluding these employees from the workplace or taking any other adverse action because the employee has a medical condition that could put them at higher risk of severe illness from COVID-19 – unless the employee's disability is a "direct threat" to the employee's health that cannot be eliminated or reduced by a reasonable accommodation.

A "direct threat" is a high standard that requires individualized assessment of the employee's medical condition, objective, and medical evidence regarding the severity, likelihood, and risk of potential harm. If an employer determines that the employee's disability does pose a "direct threat" to the employee's safety, the employer needs to then consider whether there is a reasonable accommodation (absent undue hardship) that can be provided to reduce the risk to the employee so that it would be safe for the employee to return to the workplace.

Takeaway: It is up to an employee with a disability to request a reasonable accommodation due to a medical condition that places them at higher risk for severe illness if they get COVID-19. Employers should be cautious in taking any action that would exclude or adversely impact employees they expect are at higher risk for serious illness due to COVID-19.

Maslon's Labor and Employment group is available to counsel you through return to work accommodation requests and can help identify what accommodations may be available for employees.

Once an employee requests a reasonable accommodation, an employer can engage in an "interactive process" with the employee.

An interactive process means an employer may ask questions and/or request medical documentation to determine whether the individual has a disability and if there is a reasonable accommodation that can be provided without undue hardship.

Questions may include:

how the requested accommodation will effectively address the issue;

whether another form of accommodation could effectively address the issue; and

how a proposed accommodation will enable the employee to continue performing the essential functions of the employee's position.

Because the COVID-19 pandemic has placed stress on the healthcare system, employers can elect to provide an accommodation on a temporary basis pending appropriate medical documentation. The accommodation may then be reconsidered upon receipt of medical documentation.

As with any ADA situation, an employer does not need to provide the requested accommodation if an alternative can effectively address the limitation. The EEOC has identified some potential accommodations:

Additional or enhanced protective gowns, masks, gloves, or other gear beyond what the employer may generally provide to all employees returning to the workplace.

Additional or enhanced protective measures like:

Erecting protective barriers between the employee with a disability and coworkers and the public;

Increasing space between the employee with a disability and others; or

Moving the location where the employee works within the workplace to increase social distancing.

Eliminating or substituting "marginal" job functions.

Modifying work schedules to decrease contact with coworkers or the public when working or commuting.

Takeaway: The EEOC advises employers and employees with disabilities to be creative and flexible to identify effective reasonable accommodations based upon the employee's specific job duties and the workplace itself.

We Can Help

Please contact Maslon's Labor & Employment Group if you have questions related to returning to work in the midst of the global COVID-19 pandemic.

]]>Thu, 21 May 2020 00:00:00 Zhttps://www.maslon.com/cares-act-employer-guidance-on-the-expansion-and-extension-of-unemployment-benefits
The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") enacted into law on March 27, 2020, provides for the expansion and extension of unemployment benefits. The three main unemployment benefits programs included as part of the CARES Act are highlighted below with a summary of guidance on each for your convenience:

Federal Pandemic Unemployment Compensation,

Pandemic Emergency Unemployment Compensation, and

Pandemic Unemployment Assistance.

Please note: Although the above programs are 100% federally funded, the benefits will be administered by a state's unemployment office once the state enters into an agreement with the U.S. Department of Labor ("DOL").

FEDERAL PANDEMIC UNEMPLOYMENT COMPENSATION

The Federal Pandemic Unemployment Compensation ("FPUC") program provides an additional $600 per week payment to individuals who are collecting regular unemployment benefits as well as those who are now eligible for unemployment benefits as a result of the CARES Act. The additional $600 per week is only available through July 31, 2020.

According to DOL guidance issued on April 4, 2020, the two-step process to calculate and determine entitlement to the $600 FPUC payments is:

The state will calculate the weekly benefit amount that the individual would be entitled to receive under regular unemployment compensation or under one of the expanded unemployment compensation programs provided for in the CARES Act; and

If the individual is eligible to receive at least $1 of such unemployment benefits for the claimed week under either the regular state program or one of the expanded programs, the individual will receive the full additional $600 FPUC payment. Each state's maximum weekly unemployment benefits amounts (or caps) are not changed or impacted by the FPUC benefits.

Eligibility Requirements: To be eligible for benefits, an employee must have hours reduced to under 32 hours per week and be receiving wages that are less than their weekly benefit amount. Minnesota's weekly unemployment benefit amount is approximately 50% of an individual's average weekly wages up to the maximum unemployment benefit of $740 per week.

Examples based on Minnesota's unemployment compensation program:

Scenario A: Employee is laid off, with no continuing salary or wages. Employee's average weekly wages at time of termination were $1,480.

Benefit Calculation: 50% of employee's regular wages is $740. Therefore, this individual would likely be entitled to the maximum possible payment of $740 per week, plus the additional $600 FPUC payment per week.

Scenario B: Employee is still working, but has had hours and pay reduced. Employee's average weekly wages had been $1,480. Employee had been working full time, but is now working only 15 hours per week and receiving wages of $500 per week.

Benefit Calculation: 50% of employee's regular wages is $740, so that is their maximum weekly benefit amount. Fifty percent of the employee's current weekly earnings—so, $250—will be deducted from the employee's benefit amount, resulting in an anticipated unemployment benefit of $490 for that week [$740 – $250 (50% of $500) = $490]. Because this employee was still eligible that week for state unemployment benefits, they will also receive the additional $600 payment per week through FPUC.

Scenario C: Employee is still working, but has had hours and pay reduced. Employee's average weekly wages had been $1,000. Employee had been working full time, but is now working only 30 hours per week and receiving wages of $750 per week.

Benefit Calculation: 50% of employee's regular wages is $500, so that is their maximum weekly benefit amount. Because employee is receiving wages higher than their maximum benefit amount, employee is not entitled to any unemployment benefit for that week. Because this employee is not eligible to receive even $1 of regular state unemployment benefits, they will not receive the additional $600 payment per week through FPUC.

NOTE: FPUC is all or nothing—it is not prorated.

No impact on employer's experience rating

The FPUC benefits will not impact an employer's experience rating for purposes of calculating an employer's unemployment contribution rate. And in Minnesota, the Governor ordered that the Minnesota Unemployment Insurance Program may not use unemployment benefits paid as a result of the COVID-19 pandemic in computing the future tax rate of a tax paying employer.

No waiting period

For unemployment insurance benefit accounts established between March 1, 2020, and December 31, 2020, the State of Minnesota, like many other states, is suspending the non-payable week requirement, which will allow individuals to become eligible for unemployment benefits as quickly as possible.

Minnesota now requires employer notice to separated employees

In Minnesota, as of April 6, 2020, employers must notify separated employees that they can apply for unemployment insurance benefits. This notice requirement is effective through December 31, 2020. Many employers have been providing this notice already but it is now required.

PANDEMIC EMERGENCY UNEMPLOYMENT COMPENSATION

The CARES Act also provides an additional 13 weeks of Pandemic Emergency Unemployment Compensation ("PEUC") to individuals who have already exhausted their unemployment benefits. This 13-week extension/continuation of state unemployment benefits is available for weeks of unemployment ending on or before December 31, 2020. PEUC benefits include the unemployment benefits that an individual is entitled to receive under applicable state or federal law, plus the $600 FPUC payments while such FPUC benefits are in effect.

To be eligible for PEUC benefits, an individual must have exhausted their applicable unemployment benefits under state or federal law, not be receiving unemployment compensation under Canadian law, and be able and available to work and be actively seeking work. However, states must allow flexibility around the "actively seeking work" requirement where individuals are unable to search for work for reasons relating to COVID-19.

In Minnesota, unemployment benefits are typically available for up to 26 weeks, but as a result of the PEUC program under the CARES Act, an individual in Minnesota may receive unemployment benefits for up to 39 weeks, through the end of December 2020. (But remember that the $600 FPUC payments end on July 31, 2020.)

PANDEMIC UNEMPLOYMENT ASSISTANCE

The CARES Act also establishes the Pandemic Unemployment Assistance ("PUA") program which provides up to 39 weeks of unemployment benefits (including the $600 FPUC payments, until they expire), to those individuals who have exhausted their regular unemployment benefits or who are not typically eligible for regular unemployment benefits, including individuals who are:

independent contractors,

self-employed,

seeking part-time employment, or

lacking sufficient work history.

The PUA program is not available to individuals who have the ability to work remotely or telework or who are receiving paid leave benefits; however, if such telework hours with pay or paid leave benefits are for less than the individual's customary work week, they may be eligible for a reduced benefit.

An individual who qualifies for and is covered by the PUA benefits must self-certify to the applicable state that they are able and available to work except that they are unemployed, partially unemployed, or are unable to work as a result of one of the COVID-19 related reasons set forth in the CARES Act and listed below:

The individual has been diagnosed with COVID-19 or is experiencing symptoms of COVID-19 and seeking a medical diagnosis;

A member of the individual's household has been diagnosed with COVID-19;

The individual is providing care for a family member or a member of the individual's household who has been diagnosed with COVID-19;

A child or other person in the household for which the individual has primary caregiving responsibility is unable to attend school or another facility that is closed as a direct result of the COVID-19 public health emergency and such school or facility care is required for the individual to work;

The individual is unable to reach the place of employment because of a quarantine imposed as a direct result of the COVID-19 public health emergency;

The individual is unable to reach the place of employment because the individual has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;

The individual was scheduled to commence employment and does not have a job or is unable to reach the job as a direct result of the COVID-19 public health emergency;

The individual has become the breadwinner or major support for a household because the head of the household has died as a direct result of COVID-19;

The individual has to quit his or her job as a direct result of COVID-19;

The individual's place of employment is closed as a direct result of the COVID-19 public health emergency; or

The individual meets any additional criteria established by the U.S. Secretary of Labor for unemployment assistance.

On April 5, 2020, the DOL issued guidance [Unemployment Insurance Program] with a list of examples and explanations for each of the foregoing COVID-19 circumstances that may allow an individual to qualify for PUA benefits and further instructs that while such list is non-exhaustive, any other qualifying circumstances must be applied by the states in a manner consistent with the examples provided in the guidance. The PUA benefits are available through the end of December 2020.

We Can Help

Please contact Maslon's Labor & Employment Group and Corporate & Securities Group if you have questions related to the unemployment benefits changes or programs under the CARES Act.

]]>Mon, 20 Apr 2020 00:00:00 Zhttps://www.maslon.com/covid-19-key-business-resources-under-the-cares-act
UPDATE: As of April 16, 2020, the Small Business Administration is no longer accepting new loan applications for the Paycheck Protection Program after reaching its $349 billion lending limit. Approved applications that remain undisbursed are not expected to be affected by this application freeze, but unprocessed applications will be on hold unless Congress approves additional funding.

President Trump signed into law an updated version of the CARES Act (the "Act") on March 27, 2020. The Act provides an estimated two trillion dollars' worth of relief for individuals and businesses in an effort to mitigate the effects of the ongoing COVID-19 pandemic. The Act makes available emergency funds in the form of loans, credits, and grants to businesses of all sizes.

Given the emergent situation, the Act was drafted and passed expeditiously, which resulted in certain provisions (and programs) lacking detail or otherwise requiring further rulemaking. The summary below provides our current understanding of the Act, but as more details are made available (i.e., rules are promulgated by the applicable government bodies and/or insight is gained from our experience with the Act), Maslon will provide updates.

Update: The summary below has been updated to include information on the Main Street Lending Program announced on April 9, 2020, and to reflect clarifications found within the Interim Final Rule for the Paycheck Protection Program released on April 2, 2020 (the "Interim Final Rule"). The full Interim Final Rule is available at sba.gov.

Scroll down to view the full information on key resources available to businesses, including provision eligibility and processes, or use the below links to go directly to the section which interests you most:

Business Loans

Paycheck Protection Loans for Small Businesses

The most significant financial resource available for small businesses under the Act is the "Paycheck Protection Program" (the "Program"). Employers with 500 or fewer employees can obtain loans under this Program through the Small Business Administration ("SBA") Section 7(a) loan program to pay for payroll costs and other expenses (e.g., interest on mortgage loans and other secured debt, rent and utility costs) from February 15, 2020, through June 30, 2020. Payroll costs include employee salary (up to $100,000/year for an individual employee), wages, commissions, payment for vacation, parental, family, medical, or sick leave, health and retirement benefits payments, and other costs.

The SBA clarified in the Interim Final Rule that payments made to independent contractors do not constitute payroll costs. The SBA clarified in the Interim Final Rule – Additional Eligibility Criteria and Requirements for Certain Pledges of Loans that payroll costs also include partnership draws. Partnerships and limited liability companies filing taxes as a partnership may report the self-employment income of general active partners as payroll costs (up to $100,000 annualized) on a PPP loan application filed by or on behalf of the partnership. A partner cannot submit a separate loan application as a self-employed individual. The Interim Rule is inconsistent on whether the payroll cost calculation is based upon the trailing twelve months prior to submitting a loan application or the prior calendar year. Maslon will provide additional updates as more guidance becomes available.

Loan Eligibility

Loans under the Program are available to the following businesses as long as the business was operational as of February 15, 2020, had employees, and paid wages and payroll taxes:

Businesses with up to 500 employees, including part time employees.

"Small business concerns" are generally eligible for SBA loans, which are independently owned and operated for-profit companies with a place of business in the U.S. (and that operate primarily within the U.S. or make significant contributions to the U.S. economy through the payment of taxes or use of American products, materials, or labor). This would generally exclude nationally-recognized companies. Whether a business is an eligible small business concern is determined by established SBA regulations, based upon limits on either revenue or employee count. Such limits vary by industry. Refer to the SBA's Table of Small Business Size Standards Matched to NAICS Codes, available at sba.gov.

Businesses in the Accommodation and Food Service Industries (e.g., full-service restaurants, hotels) are eligible provided that if the business has more than one physical location, it does not employ more than 500 employees at each location.

SBA "affiliation rules"—meaning that the SBA generally counts the employees or annual receipts of a business's affiliates when determining eligibility—are also waived for: (1) businesses in the Accommodation and Food Service Industries that employ not more than 500 employees; (2) franchises; or (3) businesses that receive financial assistance from a small venture investment company licensed under the SBA. For example, if a restaurant owner owns 51% of another restaurant business, the general SBA rule that the employees or receipts of the second restaurant is/are counted in determining the business's eligibility is waived.

Loan Details

Non-seasonal businesses (in existence between February 15, 2020, through June 30, 2020) may obtain loans for up to $10 million. However, the amount of the loan a non-seasonable business is eligible for would be the lesser of: (1) The average monthly payroll costs (as described above) during the year prior to making the loan x 2.5; or (2) $10 million. Note, however, that the outstanding amount of any loan made under the SBA's Disaster Loan Program between January 31, 2020, and the date upon which such loan may be refinanced as part of the Program will be added to the preceding sub-section (1), which could further increase the loan money available to a business.

Standard fees for SBA Section 7(a) loans are waived for loans made under the Program. The SBA's "credit elsewhere" test (i.e., the requirement that a small business is unable to obtain credit elsewhere) is also waived for these loans.

Loans are required to be without recourse, must be unsecured, and cannot require a personal guarantee.

No yearly or guarantee fees for the loan, and all prepayment penalties are waived.

The SBA clarified in the Interim Final Rule that the interest rate for a loan is 1%.

The SBA clarified in the Interim Final Rule that loan payments are deferred for six months. Interest will continue to accrue during the deferment period.

The SBA clarified in the Interim Final Rule that least 75% of the loan amounts must be used for payroll costs.

The SBA clarified in the Interim Final Rule that loan maturity is 2 years.

Because payroll costs only include employee cash compensation and partnership draws up to $100,000/year, businesses should take care not to use loan proceeds to pay any portion of these items in excess of $100,000. For example, if an employee earns $120,000/year, the employer may use loan proceeds to pay $100,000 on a pro rata basis of the employee’s salary, but must pay the remaining $20,000 on a pro rata basis using other funds. For purposes of loan forgiveness, this means a maximum of $15,385 per individual of loan proceeds may be used during the eight-week covered period.

Please note that if PPP funds are used for unauthorized purposes, the SBA will direct businesses to repay those amounts. Knowingly misusing these funds may subject the business, shareholders, partners, and/or members to additional liability, such as fraud charges.

Loan Forgiveness

Loans used for eligible expenses incurred during the 8-week period following the date of origination may be forgiven. In addition to payroll costs, eligible expenses include mortgage and other secured-debt interest payments, rent, and utilities, so long as those expenses existed as of February 15, 2020. For non-seasonal employers, the amount eligible for forgiveness is reduced by the following formulas:

For reductions in employees, the maximum amount eligible for forgiveness, multiplied by:

The average number of full-time equivalent employees ("FTEs") per month, calculated by the average number of FTEs for each pay period within a month, for the period between February 15, 2020, through June 30, 2020, divided by either, at the election of the employer:

The average number of FTEs per month employed from February 15, 2019, to June 30, 2019; or

The average number of FTEs per month employed from January 1, 2020, to February 29, 2020.

For reductions in wages, the amount of any reduction in total salary or wages of any employee for the period between February 15, 2020, through June 30, 2020, that exceeds 25% of the employee's salary or wages during the employee's most recent full quarter of employment before the period before February 15, 2020.

Employers who have terminated employees or reduced employee wages may be relieved from these forgiveness reduction penalties if they rehire employees or make up for wage reductions by June 30, 2020. Specifically, the above calculations to reduce amounts eligible for forgiveness will not apply if an employer either:

Reduces its number of employees between February 15, 2020, and April 26, 2020, but subsequently "eliminated the reduction in the number of full-time equivalent employees"; or

Conducts a salary reduction between February 15, 2020, and April 26, 2020, but subsequently raises salaries to pre-February 15, 2020, levels by June 30, 2020.

Loan funds used to pay additional wages to tipped employees are also eligible for forgiveness. The Act is unclear if this includes tips and base wages or just base wages.

Any forgiven amounts will not be considered taxable gross income.

The SBA is required to issue regulations on the specifics of loan forgiveness (and deferment) under the Program within 30 days of the Act's enactment (i.e., by April 26, 2020).

The SBA clarified in the Interim Final Rule that forgiveness for non-payroll costs (e.g. mortgage interest, utilities) is limited to 25% of the total amount forgivable.

Loan Process

To obtain a loan under the Program, eligible businesses should apply through participating lenders offering SBA loans. In applying, the business must make good faith certifications that:

The uncertainty of current economic conditions makes the loan necessary;

Acknowledge the funds will be used for the allowable expenses (i.e., applicable payroll costs, mortgage, and other secured loan interest, rent, and utilities);

The eligible business does not have a duplicate SBA loan application pending; and

The eligible business has not received any duplicative loan amounts under the Program at any time after February 15, 2020, through the date on which the business obtains a loan through the Program.

A business may not obtain multiple loans through the Program for the same purpose (i.e., loans that are duplicative of other loans received under the Program).

Self-employed individuals, sole proprietors, and independent contractors applying for loans under the Program are required to provide certain documentation to prove eligibility, such as payroll tax filings, Forms 1099-MISC, and income and expenses from the sole proprietorship. Beyond the additional documentation requirements, the application process for these individuals is the same as for other businesses.

Expansion of SBA Disaster Loans

The Act also expands business access to economic injury disaster loans ("EIDL") through the SBA Economic Injury Disaster Loan Program. This expansion will be in effect between January 31, 2020, through December 31, 2020. These types of loans were previously available only for small business concerns, as defined by SBA, but are now temporarily available to business concerns with up to 500 employees.

Loan Eligibility

Small business concerns, defined above; or

Businesses with up to 500 employees.

Loan Details

Unlike the Paycheck Protection Program, the Act does not provide for forgiveness of EIDLs.

The amount available under an EIDL is based upon cash flow projections and demonstrated need, with a cap at $2,000,000.

Loans may be used to pay expenses incurred in the ordinary course of business. Ordinary expenses include, but are not limited, to:

Providing sick leave to employees unable to work because of the ongoing pandemic;

Maintaining payroll;

Meeting increased supply chain costs;

Rent and mortgage payments; and

Repaying debts that cannot be paid due to lost revenue.

In general, existing rules applicable to the terms of EIDLs apply. However, two existing requirements are revised for EIDLs obtained through December 31, 2020. Specifically, for loans made during this period:

Personal guarantees are not required for loans up to $200,000; and

The SBA will not require that the business is unable to obtain credit elsewhere.

Interest rates are subject to change, but currently set at 3.75%.

Term lengths of EIDLs are either 15 or 30 years.

Loan Advance

A business applying for an EIDL in response to COVID-19 may request an emergency advance from the SBA for up to $10,000. The advance must be paid by the SBA to the business within three days after receipt of the application.

An advance received does not have to be repaid by the business, even if the SBA ultimately denies the business's application for an EIDL.

Direct Loans for Eligible Businesses

The Act also provides $500 billion for loans, loan guarantees, and investments in the Federal Reserve's lending facilities to support "eligible businesses" particularly distressed by the ongoing pandemic, which include air carriers and U.S. businesses that have not received "adequate economic relief" in the form of other loans or loan guarantees under the Act. Note that loans under this program are not generally available to businesses that may have been adversely affected by COVID-19. Rather, particular industries that are most affected (e.g., airlines) would be eligible. The $500 billion is allocated as follows: $25 billion in loans and loan guarantees for air carriers; $4 billion in loans and loan guarantees for cargo air carriers; $17 billion in loans and loan guarantees for businesses critical to maintaining national security; and $454 billion for loans, loan guarantees, and investments in support of facilities established by the Federal Reserve.

Loan Eligibility

The business must:

Be created or organized in the U.S.; and

Have significant operations in and a majority of its employees based in the U.S.

Loan Details

The loan must be entered into directly by the eligible business as the borrower and cannot be forgiven.

The interest rate of the loan must be based on the risk and the current average yield on outstanding marketable obligations of the United States of comparable maturity.

Any business receiving a direct loan is prohibited for 12 months after the term of the loan, from:

For any officer or employee whose total compensation exceeded $425,000 in calendar year 2019, providing:

Compensation to such individual over such amount over any consecutive 12 months during the covered period; or

Severance benefits exceeding more than two times such 2019 compensation amount.

For any officer or employee whose total compensation exceeded $3,000,000 in calendar year 2019, providing compensation that exceeds the sum of:

$3,000,000, plus

50% of the amount in excess over $3,000,000 that the officer or employee received in calendar year 2019.

Air Carriers and related contractors (e.g., persons that perform catering functions or other functions at an airport directly related to the air transportation of persons, property, or mail) are subject to the same executive compensation limits outlined above, except that the limits apply to the two-year period ending on March 24, 2022, rather than the 12 months following the term of the loan.

Businesses that receive a loan may not conduct a stock buyback beyond the term of the loan, and must maintain at least 90% of its employment levels as of March 24, 2020, until September 30, 2020.

Mid-Size Direct Lending Program (Pending)

The Act also directs the Treasury Secretary to create a program to provide financing to banks and other lenders who make direct loans to mid-size businesses. Additional guidance on this program will be issued by the Treasury Secretary, including guidance that may permit receiving warrants, stock options, common or preferred stock or other equity under the program without triggering an ownership change under Section 382 of the Internal Revenue Code of 1986 (i.e., allowing more favorable treatment and flexibility regarding net operating loss carryforwards).

Loan Eligibility

The business:

Have between 500 to 10,000 employees;

Be created or organized in the U.S.; and

Have significant operations in and a majority of its employees based in the U.S.

Loan Details

Loans made under the to-be created program are capped at a 2% (annualized) interest rate. During the first 6 months after a direct loan is made, or for such period set by the Treasury Secretary, no principal or interest will be due and payable.

Loans may be used for employee retention purposes, and funds must be used to retain at least 90 percent of the business's workforce, at full compensation and benefits, until September 30, 2020.

Loan Process

To apply for a loan under this program, an eligible business must make a good faith certification that:

The uncertainty of economic conditions makes the loan necessary to support the ongoing operations;

The funds received will be used to retain at least 90 percent of the business's workforce, at full compensation and benefits, until September 30, 2020;

The business intends to restore not less than 90 percent of the workforce of the business that existed as of February 1, 2020, and to restore all compensation and benefits to the workers of the business no later than 4 months after the termination of the public health emergency declared on January 31, 2020;

The business is domiciled in the United States with significant operations and employees located in the United States;

The business is not a debtor in a bankruptcy proceeding;

The business is created or organized in the United States or under the laws of the United States;

The business will not pay dividends with respect to the common stock of the eligible business, or repurchase an equity security that is listed on a national securities exchange of the business while the direct loan is outstanding, except to the extent required under a contractual obligation that is in effect as of the date of the Act's enaction;

The business will not outsource or offshore jobs for the term of the loan and 2 years after completing repayment of the loan;

The business will not do away with existing collective bargaining agreements for the term of the loan and 2 years after completing repayment of the loan; and

The business will remain neutral in any union organizing effort for the term of the loan.

Main Street Lending Program

On April 9, 2020, the Federal Reserve announced preliminary details of the Main Street Lending Program, a lending program established pursuant to Section 4003(C)(3)(d)(ii) of the CARES Act, which permits the Federal Reserve to make programs aimed at providing financing to small and mid-sized businesses affected by the COVID-19 pandemic. This program offers potential relief for businesses too large to take advantage of the Paycheck Protection Program ("PPP") (which is an SBA-based lending program for small companies). More details about this program can be found at: CARES Act: The Main Street Lending Program Offers Relief for Small and Mid-Sized Businesses.

Tax Credits

Employee Retention Tax Credits

The Act creates a tax credit each quarter to offset 50% of each employee's qualifying wages, including qualifying health care plan costs, on up to $10,000 of wages paid per employee (i.e., up to $5,000 in actual credit per employee). This employee retention tax credit is available for wages incurred from March 12, 2020 – December 31, 2020, but is unavailable for paid sick leave or expanded FMLA wages paid under the Families First Coronavirus Response Act (FFCRA). Notably, this credit is in addition to the payroll tax created under the FFCRA.

Employer Eligibility

The credit is available to employers, who do not receive a loan under the Paycheck Protection Program discussed above, whose (1) operations were shut-down or partially suspended due to a COVID-19 related shut down order, or (2) gross receipts fell more than 50% when compared to the same quarter in the previous year.

For employers eligible for the credit due to a decline in gross receipts, eligibility ends with the calendar quarter in which the gross receipts exceed 80 percent of the calendar quarter in the previous year.

Private employers of all sizes may apply for the credit; however, employers with more than 100 full-time employees, may only receive the tax credit for employee wages where the employee was not providing services due to one of the reasons listed above. Employers with 100 or fewer employees qualify for the credit, regardless of whether the business is shut down pursuant to a shut-down order.

Claiming Credit

The tax credit only offsets employment taxes owed by an employer. To the extent 50% of the qualifying wages exceed the employer's employment tax liability, the employer will be refunded the difference. The Treasury Secretary is expected to issue further guidance, forms, and regulations for these tax credits, including provisions allowing businesses to receive advance payment of the credit.

The CARES Act also facilitates reimbursement for employee wages paid pursuant to the Families First Coronavirus Response Act ("FFCRA").

Employers can claim the credit each quarter they are eligible through December 31, 2020.

Delay of Payment of Employer Payroll Taxes

To provide further assistance to employers, the CARES Act authorizes deferral of 2020 payroll taxes to 2021 and 2022. Half of the deferred 2020 employment taxes must be paid by December 31, 2021. Any remaining amount owed for 2020 employment taxes is due to the IRS by December 31, 2022. Like the employee retention tax credits, this deferral is unavailable to employers who receive a small business "paycheck protection" loan. Note, there is also no provision in the Act that the IRS "trust fund recovery penalty" (which is equal to 100% of unpaid employment taxes) is being altered in any way. This penalty may be assessed against any person (including officers, employees, members, and directors) who is responsible for managing and paying employment taxes on behalf of the employer and who willfully fails to collect or pay such taxes. Accordingly, if a business is unable to pay the deferred taxes after the deferral period (e.g., due to insolvency and bankruptcy), key officers and employees may remain liable for payroll taxes.

Allowing Net Operating Losses (NOLs)—which occur when a businesses's allowable deductions exceed its taxable income within a tax period—arising in 2018, 2019, and 2020 to be carried back for up to five years (under the TCJA, no carrybacks were permitted);

Suspending the TCJA's 80 percent cap on NOL carryovers for three years (cap would not apply to taxable years beginning in 2018, 2019, and 2020); and

Suspending certain rules relevant to farming losses for NOLs arising in taxable years beginning in 2018, 2019, and 2020.

Additional Provisions

The Act includes a number of additional provisions for the benefit of unemployed workers, financial institutions, community banks, the health care industry (including medical device companies), and borrowers of federally backed mortgage loans. For more information about these and other provisions, reach out to Maslon's Corporate & Securities Group.

We Can Help

Please contact Maslon's Corporate & Securities Group and Labor & Employment Group if you have questions or need assistance taking advantage of the relief provided under the CARES Act.

]]>Thu, 16 Apr 2020 00:00:00 Zhttps://www.maslon.com/employers-dol-and-irs-provide-further-guidance-on-ffcra
The Department of Labor (DOL) has issued temporary regulations providing its interpretation of the Families First Coronavirus Response Act (FFCRA), offering further guidance to employers as they seek to comply with the new law that went into effect on April 1, 2020.

THE DOL AND IRS CLARIFY KEY DOCUMENTATION AND RECORDKEEPING REQUIREMENTS

Employees Must Make Requests for Leave in Writing. To make sure an employer has appropriate documentation to support its claim for tax credits, an employer should require an employee requesting Paid Sick Leave or expanded FMLA leave to submit a written request including the following information:

The employee's name.

The date(s) for which leave is requested.

A statement of the COVID-19 qualifying reason for leave.

A statement that the employee is unable to work or telework because of the COVID-19 qualifying reason. The DOL regulations provide that this statement may be oral. However, to support an employer's receipt of tax credits, the IRS requires this statement to be included in an employee's written request. To the extent possible, an employer should obtain this statement in writing, but this does not need to occur before the leave begins.

In addition, employees must provide the following information depending upon the qualifying reason for leave in the employee's written request for leave:

If an employee takes leave due to an order to isolate or quarantine, the employee must include the name of the government entity that issued the order.

If an employee takes leave due to advice by a health care provider to self-quarantine, the employee must include the name of the heath care provider.

If the person subject to quarantine or self-quarantine is not the employee and the employee is seeking leave to care for that person, the employee must also include the person's name and the person’s relationship to the employee.

If an employee is seeking leave to care for a child whose school or childcare has been closed or is unavailable, the employee must provide: (a) the name and age of the child; (b) the name of the school, place of care, or child care provider that closed or became unavailable; and (c) a statement representing that no other suitable person is available to care for the child during the period of the requested leave.

If an employee is unable to work or telework during daylight hours due to a need to provide care for a child older than fourteen years old, the employee must also provide a statement that special circumstances exist requiring the employee to provide the care.

Employer Recordkeeping of Employee Leave Requests. Employers are required to retain all documentation provided by employees in support of their leave requests for four years, regardless of whether the leave was granted or denied. If an employee provided oral statements to support a request for leave, the employer needs to document and maintain that information in its records as well for four years.

IRS Documentation. The IRS issued guidance that details the information and documentation that an employer needs to claim its tax credits: IRS COVID-19 Related Tax Credits: Q&A. The IRS has issued a new Form 7200 for employers to use when seeking an advance payment of the tax credits.

Recordkeeping to Support IRS Tax Credits. In addition to the relevant tax forms (Form 7200 and Form 941), Employers should keep, for four years, documentation to show how the employer:

The new DOL regulations provide additional information about other aspects of the new leave requirements, and the DOL has supplemented their guidance on the FFCRA, available at U.S. DOL FFCRA: Q&A. Key areas that the DOL has clarified in its new regulations and guidance are summarized below:

Furloughed and Laid Off Employees Do Not Count. For purposes of determining whether an employer has 500 or fewer employees, employers do not count employees who have been furloughed or laid off.

Eligibility for Leave Depends Upon Being Unable to Work. An employee is only eligible for Paid Sick Leave or expanded FMLA leave if the employee is unable to work or telework. In other words, but for the COVID-19 qualifying event, the employee could perform work or telework that the employer has available.

Subject to a Quarantine or Isolation Order Related to COVID-19. The DOL regulations interpret Federal, State, and local quarantine or isolation orders broadly. However, to be entitled to Paid Sick Leave, the government order must be the reason the employee is unable to work or telework even though the employer has work that the employee could do. An employee is not eligible for Paid Sick Leave if the employer temporarily closes down and does not have work for the employee, even if the closure was due to the government order.

Paid Sick Leave While Seeking Medical Diagnosis is Limited. If an employee requests Paid Sick Leave on the grounds the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis, leave is limited to the time the employee is unable to work because the employee is taking affirmative steps to obtain a medical diagnosis, such as making, waiting for, or attending an appointment for a test for COVID-19.

Self-Diagnosis is Not Sufficient. An employee who decides to self-quarantine without seeking a medical diagnosis is not eligible for Paid Sick Leave.

Accrued PTO May Supplement Pay for Expanded FMLA Leave. An employee and employer may agree to use accrued PTO to supplement paid expanded FMLA leave so the employee receives 100% of the employee's regular pay, instead of the 2/3 amount provided under the FFCRA.

Self-Determination of Limited Small Business Exemption. The DOL regulations make clear that an employer need not apply for the small business exemption but can make a determination on its own that it satisfies the regulatory criteria for this exemption. Businesses must document each denial of leave and maintain the required documentation for a period of four years.

We Can Help

Contact Maslon's Labor and Employment Group with further questions or for assistance with the FFCRA.

]]>Tue, 07 Apr 2020 00:00:00 Zhttps://www.maslon.com/covid-19-compliance-with-the-ffcra-frequently-asked-questions-and-answers
To assist employers in compliance with Emergency Families First Coronavirus Response Act (FFCRA), which takes effect on April 1, 2020, Maslon's Labor and Employment Group has reviewed the various guidance and provided answers to the most frequently asked questions below:

Frequently Asked Questions and Answers:

1. What key resources have been provided by governmental agencies and Congress for further guidance to understand requirements of the Act?

The Department of Labor supplemented their original guidance on the FFCRA this week, available at U.S. DOL FFCRA: Q&A.

The Treasury Department and IRS also weighed in regarding the tax credit reimbursements under the Act (forms and additional guidance are expected soon).

Congress included provisions in the newly enacted CARES Act which clarify eligibility of rehired employees and facilitates reimbursement for leave paid under the FFCRA.

2. What is the interplay between the two types of leave under the FFCRA?

Under the FFCRA, employees are eligible for:

up to 80 hours of Paid Sick Leave, and

up to 12 weeks of job-protected expanded FMLA leave – up to 10 weeks of which is paid.

The first 10 days of leave under the Emergency Family and Medical Leave Expansion Act are unpaid, but employees may use their Paid Sick Leave or any accrued vacation or paid time off (PTO) under their employer's policy. One additional difference between the two types of leaves relates to length of employment: employees are eligible for Paid Sick Leave on day one, while employees must be employed for at least 30 days to qualify for expanded FMLA leave.

If an employee does not use their Paid Sick Leave for the first ten days of expanded FMLA leave, the employee may use the Paid Sick Leave at any time prior to December 31, 2020.

3. If an employee has already exhausted leave under the FMLA, are they eligible for twelve additional weeks of expanded FMLA leave?

No. An employee may only take a total of 12 weeks of leave during a 12-month period under the FMLA, including the Emergency Family and Medical Leave Expansion Act. If an employee has already used some or all of their 12 weeks of FMLA leave entitlement during the preceding 12-month period, their eligibility for additional expanded FMLA will be reduced by the amount of leave they have already used.

Similarly, any leave taken as expanded FMLA leave counts against the employee's entitlement to 12 weeks of preexisting FMLA leave in a 12-month period. For instance, if an employee takes 2 weeks of expanded FMLA leave because they are unable to work and need to care for a child whose school is closed due to COVID-19 and then later becomes eligible for traditional FMLA leave, the employee is only entitled to take the latter FMLA leave for 10 weeks. Note that if an employee is not eligible for traditional FMLA because the employer is not subject to regular FMLA leave or because the employee has not been with the employer for 12 months, this analysis does not apply–the FFCRA does not expand eligibility for traditional FMLA.

An employee is entitled to Paid Sick Leave regardless of the amount of leave previously taken under the FMLA. The Department of Labor guidance makes clear that Paid Sick Leave is not a form of FMLA leave. If an employee elects to use Paid Sick Leave for the first two weeks of expanded FMLA leave, which would otherwise be unpaid (see Question 1), then the first two weeks would count against the employee's entitlement to 12 weeks of expanded FMLA and FMLA leave in a 12-month period.

4. Can an employee take Paid Sick Leave or expanded FMLA leave intermittently?

Employees may use Paid Sick Leave or expanded FMLA leave intermittently in some circumstances–the key factors are whether the employer agrees to the use of intermittent leave and whether permitting intermittent leave would increase COVID-19 exposure risk. The Department of Labor encourages employers and employees to be flexible and work together to establish a voluntary arrangement that may incorporate use of leave intermittently.

Employees not working from home: An employer may permit an employee who is working at their usual worksite to take their leave intermittently ONLY if the qualifying reason for their leave is to take care of a child whose school or place of care is closed due to COVID-19. This is likely to come up in situations where the employee shares child care duties with another adult, and the employee needs to miss some but not all work as a result of the school or daycare closure. An employee working at their usual worksite cannot take intermittent leave for reasons related to illness or exposure to COVID-19. Allowing intermittent leave in those circumstances would defeat the purpose of providing the leave as it would increase exposure risks for other employees.

Employees working from home: An employer may permit an employee who is working from home to take their leave on an intermittent basis for any qualifying reason. For example, an employee who has COVID-19, with only minor symptoms, may be able to telework for partial days but may need to work fewer hours due to the symptoms. Expanded FMLA leave may also be offered intermittently for employees to the extent the employee is unable to work their normal schedule of hours because they are caring for a child whose school is closed or for whom care is unavailable due to COVID-19.

An employer can determine the increment (e.g., no less than half-day increments) for intermittent leave. However, the Department of Labor encourages employers to be flexible when setting increments and setting intermittent leave schedules of employees. For instance, employers that have the flexibility could create solutions for parents who are able to telework but not full-time due to taking care of children. It may be feasible for parents to each take leave intermittently from their employers, allowing them to split childcare duties throughout the week.

5. What costs are covered by the tax credits under the FFCRA?

Covered employers are eligible for dollar-for-dollar tax-credit reimbursement for all wages paid to an employee who takes leave under the FFCRA for a qualifying reason on or after April 1, 2020, subject to the per-day and aggregate caps. For a comprehensive breakdown of the qualifying reasons for Paid Sick Leave and expanded FMLA leave and their respective caps, view Maslon's March 19, 2020, Legal Alert. In addition, pursuant to guidance from the Treasury Department and IRS, additional tax credits will be available to cover costs paid or incurred by employers to maintain health insurance coverage for the eligible employee during the leave period.

6. How do employers obtain the tax credit reimbursement?

The IRS will provide applicable forms, instructions and information for the procedures that should be followed to be reimbursed.

Under the newly-enacted CARES Act, employers seeking tax credits for paid leave provided under the FFCRA can retain amounts equal to qualifying sick and child care leave otherwise owed to the IRS in payroll taxes (withheld federal income taxes, Social Security, and Medicare taxes) each calendar quarter, without penalty. This means that instead of paying payroll taxes to the government and waiting for a reimbursement, employers can immediately offset their taxes that would otherwise be due.

To the extent payroll taxes are insufficient to cover the cost of qualifying leave under the FFCRA, employers can request an accelerated refund payment from the IRS. The IRS will provide application forms for accelerated payments, which the IRS hopes to refund within 2 weeks.

7. Can employers be refunded for leaves beginning before April 1, 2020?

No. Any paid leave provided prior to the FFCRA's effective date of April 1, 2020, does not qualify for tax credit reimbursement. Along those lines, an employee may not request paid leave under the FFCRA for any unpaid leave taken prior to the FFCRA's effective date.

According to Department of Labor guidance, employers seeking tax credit reimbursement for leave under the FFCRA should maintain records documenting employee eligibility for leave. Employers should consult the applicable IRS forms and require employees to submit information the employer will need to claim its tax credit.

The employer should also collect supporting documentation for either type of paid leave. For Paid Sick Leave, this could be a copy of a governmental isolation order or a qualified health care provider's advice to self-quarantine. Health care providers, whose advice may be relied upon as a qualifying reason for Paid Sick Leave, include: licensed doctor of medicine, nurse practitioner, or other health care provider permitted to issue a certification for purposes of the FMLA. Note, however, that the CDC has advised that health care providers have limited capacity to provide standard medical documentation for absences. Employers may want to consider alternatives to this type of standard documentation.

Where leave is qualified due to school closure or lack of child care due to COVID-19, an employee should also provide a copy of the closure notice that was posted by the government, school, or daycare online or published in a newspaper. Employees could also provide an email announcing the closure from an employee of the school, childcare provider, or other place of care.

To the extent an employee fails to make a request with sufficient information, an employer is not required to provide leave. However, there are no "magic words" required to request the leave.

Employers should take a flexible approach regarding documentation, including accepting documentation by email and giving employees sufficient time to gather and provide all pertinent information. Consider advising employees that the company "reserves the right" to request documentation at a later date, especially in the case of documentation from health care providers.

9. Is an employer responsible for continuing an employee's health insurance coverage while on leave?

Yes. An employee taking expanded FMLA leave is entitled to continuation of their elected group health coverage on the same terms as if they continued to work. This includes coverage for enrolled family members. However, an employee must generally continue to make normal contributions to the cost of their health coverage, unless the employer has offered alternative arrangements.

Employees receiving Paid Sick Leave are also entitled to continued health coverage. Also, Paid Sick Leave days taken by employees currently completing a waiting period for health plan eligibility count towards their waiting period.

10. Are employees who are rehired following a layoff eligible for Paid Sick Leave or expanded FMLA leave?

Because all employees are eligible for Paid Sick Leave, regardless of how long they have been employed, employees are automatically eligible for Paid Sick Leave upon rehire.

Conversely, to be eligible for expanded FMLA leave, employees must have been on the employer's payroll for at least 30 calendar days prior to requesting the leave. Under the CARES Act provisions, an employee who is rehired after being laid off on or after March 1, 2020, can satisfy the requirement that they be "employed for at least 30 calendar days" if they were on the employer's payroll for at least 30 of the last 60 days before their layoff.

11. Can employees who are on furlough qualify for this leave?

No. If an employer furloughs an employee because it does not have enough work or business for the employee, the employee is not entitled to then take Paid Sick Leave or expanded FMLA leave. This is true for employees furloughed before or after the effective date of the statute, April 1, 2020.

12. Can I furlough or layoff an employee while they are on Paid Sick Leave or Expanded FMLA leave?

Employees may be selected for furlough or layoff while they are using Paid Sick Leave or expanded FMLA leave so long as their use of either leave is not a reason they were selected. The employee is entitled to Paid Sick Leave or expanded FMLA used prior to the furlough. After the furlough, the employee is no longer entitled to Paid Sick Leave or expanded FMLA leave.

13. Which employees fall within the "health care provider" exemption, meaning an employer is not required to provide them Paid Sick Leave and/or expanded FMLA leave?

A "health care provider" is anyone employed at any doctor's office, hospital, health care center, clinic, post-secondary educational institution offering health care instruction, medical school, local health department or agency, nursing facility, retirement facility, nursing home, home health care provider, any facility that performs laboratory or medical testing, pharmacy, or any similar institution, employer, or entity. This definition encompasses these types of employees at any permanent or temporary institution, facility, location, or site where medical services are provided that are similar to such institutions.

Additionally, a "health care provider" includes any individual employed by a business that contracts with any institutions, employers, or entities to provide services or to maintain the operation of the facility. This definition also includes anyone employed by any entity that provides medical services, produces medical products, or is otherwise involved in the making of COVID-19 related medical equipment, tests, drugs, vaccines, diagnostic vehicles, or treatments.

Further, the highest official of a state or territory, including Washington D.C., may include any individual in this definition that it determines is necessary for that jurisdiction's response to COVID-19.

14. When is an employer eligible for a small business exemption?

A small business is exempt from providing Paid Sick Leave and expanded FMLA if (1) the business employs fewer than 50 employees; (2) the qualifying reason for leave is care of a child whose place of care or school is closed due to COVID-19; and (3) providing Paid Sick Leave or expanded FMLA leave would jeopardize the viability of the business as an ongoing concern, based upon the determination by an authorized business official that:

The provision of Paid Sick Leave or expanded FMLA leave would result in the small business's expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;

The absence of the employee or employees requesting Paid Sick Leave or expanded FMLA leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or

There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting Paid Sick Leave or expanded FMLA leave, and such labor or services are needed for the small business to operate at a minimal capacity.

We Can Help

Contact Maslon's Labor and Employment Group with further questions or for assistance drafting FFCRA leave policies and leave request forms.

]]>Mon, 30 Mar 2020 00:00:00 Zhttps://www.maslon.com/covid-19-key-business-considerations-for-minnesota-emergency-executive-order-20-20
Under recently issued Emergency Executive Order 20-20 (the "Order"), beginning Friday, March 27, 2020, at 11:59 pm, all persons living in the State of Minnesota are ordered to stay in their homes for two weeks (through April 10th at 5:00 pm) in an effort to slow the spread of COVID-19. Workers in "Critical Sectors" as defined in the Order who can work from home must do so, but are exempt from the Order's restrictions to the extent they cannot. This includes, but is not limited to, workers who fit into any of the U.S. Department of Homeland Securities' Guidance on the Essential Critical Infrastructure Workforce ("CISA Guidance") categories. For example, the following businesses (and their workers) are considered essential:

Healthcare and public health, including workers supporting manufacturers and technicians, logistics, and warehouse operators.

Food and agricultural, such as grocery workers, restaurant carry-out and delivery employees, and farm workers.

Businesses can also determine eligibility by reviewing the MN Critical Businesses List. If an industry description is marked as YES in the "Critical Industry" column, then a worker in that industry is essential and is exempt from the Order to the extent the worker is going into the business's physical location for job functions that cannot be done from home.

Employee Verification Letters

Although not required under the Order, it is best practice for employers to provide a letter to their employees to keep on hand that verifies that the employee works for the employer, and the employee's work for the employer is in furtherance of the employer's business operations that fall within one of the Order's identified sectors. This is a particularly good idea as the Order provides criminal penalties for willful violators. Providing employees with an employee verification letter can help put the employee's mind at ease if they are stopped by law enforcement on the way to work.

We Can Help

Please contact attorneys in Maslon's Corporate & Securities and/or Labor & Employment Groups if you have questions or would like assistance drafting an employee verification letter.

Effective Date. The DOL indicates that the effective date of FFRCA is April 1, 2020.

Counting Employees. For the "500 or fewer employer" threshold, all full-time and part-time employees in the United States and its territories are counted, including employees on leave. The DOL also gives direction for counting temporary employees and day laborers.

Calculating Wages for Paid Sick Leave and Expanded FMLA Leave. The regular rate of pay is determined by averaging pay over the six months preceding the leave, including overtime pay, commissions, and tips. The DOL gives two methods for calculating the regular rate of pay for employees who have been employed for less than six months.

Prior Paid Sick Leave Does Not Count. The Emergency Paid Sick Leave Act imposes a new leave requirement on employers that is effective beginning on April 1, 2020.

Grace Period. The DOL has also announced that there will be a 30-day non-enforcement period, giving employers, acting reasonably and in good faith, time to comply with the FFCRA.

We expect additional guidance this week and will provide further updates as we learn more.

We Can Help

Please contact Maslon's Labor & Employment Group if you have questions or would like assistance reviewing your leave policies.

]]>Wed, 25 Mar 2020 00:00:00 Zhttps://www.maslon.com/covid-19-business-update-tax-deadline-and-proposed-cares-act
Maslon is closely monitoring the government response to the Coronavirus (COVID-19) pandemic and its potential impact on businesses.

April 15th Income Tax Return Filing Deadline
Today, Treasury Secretary Steve Mnuchin stated the IRS will move the income tax filing deadline from April 15 to July 15. This will allow taxpayers additional time to file and make payments without the imposition of penalties or interest. Individual taxpayers and entities being taxed as S corporations, C Corporations, sole proprietorships, or single member limited liability companies, are subject to the April 15th deadline and will benefit from this extension.

Proposed Legislation: The Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act")
On March 19, Senate Republicans unveiled proposed legislation seeking to provide individuals and businesses with a variety of benefits to combat the financial fall-out associated with the ongoing COVID-19 pandemic. Although the bill is likely to change as it moves through Congress, if passed into law in its current form, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") would potentially impact businesses. The Act is comprised of seven divisions, each divided into further titles and subdivisions. Those most applicable to business owners include:

Division A
Division A seeks to support small businesses by expanding the Small Business Administration ("SBA") Section 7(a) loan program through December 31, 2020. Under the expansion, certain businesses that employ less than 500 employees would be eligible to receive a loan, the proceeds of which could be used for payroll support (including paid sick, medical, or family leave), employee salaries, rent, utilities, or other debt obligations. Each loan would be capped at the price of covering the business's monthly operating costs (e.g. payroll, utilities, mortgage and other debt payments) for up to four (4) months—up to the maximum amount of $10,000,000. All loan amounts used for applicable payroll costs would be eligible for forgiveness.

Division B
Title II of Division B would provide several tax-related benefits to businesses to mitigate financial damage caused by the COVID-19 pandemic. Proposed benefits include:

Delay of estimated tax payments for corporations. Allows corporations to postpone estimated tax payments due after the enactment of the bill until October 15, 2020.

Delay of payment of employer payroll taxes. Allows deferring of payment of the business's share of the Social Security tax for which they are otherwise responsible, with deferred taxes being paid over the two years after enactment.

Modifications for net operating losses. Relaxes limitations on the business's use of losses from prior years—particularly that a loss from 2018, 2019, or 2020 can be carried back five years—and temporarily removes the taxable income limitation to allow net operating losses to fully offset income.

Modification of limitation on losses for taxpayers other than corporations. Modifies the loss limitation applicable to pass-through entities and sole proprietors so they can benefit from the net operating loss carryback rules described above.

Modifications of limitation on business interest. Temporarily increases the amount of interest expense businesses may deduct on their tax returns, by increasing the 30-percent limitation to 50 percent of the taxable income for 2019 and 2020.

Technical amendment regarding qualified improvement property. Enables business—with particular attention to the hospitality industry—to immediately write off costs associated with improving facilities instead of having to depreciate those improvements over the 39-year life of the building.

Installments not to prevent credit or refund of overpayments or increase estimated taxes. Corrects an error in the Tax Cuts and Jobs Act to allow businesses to recover any overpayment of taxes paid pursuant to the Section 965 one-time repatriation toll charge.

Restoration of limitation on downward attribution of stock ownership in applying constructive ownership rules. Clarifies that certain foreign subsidiaries should not be subject to certain requirements of the Tax Cuts and Jobs Act, and will allow those companies to amend their 2018 tax return to reflect the clarification.

Division C
Division C, which is titled "Coronavirus Economic Stabilization Act of 2020," seeks to provide loans to eligible, severely distressed businesses impacted by COVID-19 (up to $208,000,000,000 in the aggregate). This includes up to $50,000,000,000 to passenger air carriers, $8,000,000,000 to cargo air carriers, and $150,000,000,000 to other eligible businesses. Executives at companies receiving money may not make more than $425,000 in total annual compensation for two years, or receive severance pay or other termination benefits which exceed twice the maximum total compensation the executive received in 2019.

Division D
Title III of Division D provides various provisions relating to paid leave. This includes providing guidance on the applicability of the Emergency Family Medical Leave Expansion Act ("EFMLEA") eligibility for rehired employees after a layoff. Currently, rehired employees would not be EFMLEA eligible until employed for at least 30 days. The bill would change that, providing that employees who were laid off after March 1, 2020, and were rehired would be immediately eligible for EFMLEA protections, provided the employee had worked for that employer for at least 30 of the last 60 calendar days prior to the layoff. Further, the bill provides that if an employer fails to make an employment tax deposit with the IRS due to the anticipation of EFMLEA payroll credits, any tax penalties will be waived.

Division E
Division E provides that Section 131 of the Emergency Economic Stabilization Act of 2008, which relates to certain restrictions on guaranteeing money market mutual funds, would not apply during the national emergency period for COVID-19.

We Can Help
Maslon is closely monitoring this bill as it moves through Congress and will continue to provide updates on policies that will affect your businesses. In the meantime, Maslon's Corporate & Securities and Labor & Employment attorneys are here to answer any questions you may have relating to new and proposed laws addressing the COVID-19 pandemic.

]]>Fri, 20 Mar 2020 00:00:00 Zhttps://www.maslon.com/emergency-covid-19-legislation-is-now-the-law-employers-need-to-prepare-to-provide-paid-sick-and-fmla-leave-to-eligible-employees
President Trump signed the Emergency Families First Coronavirus Response Act into law late last night. Beginning April 2, 2020, and continuing until December 31, 2020, employers with 500 or fewer qualifying employees will need to offer paid sick and FMLA leave to their employees affected by COVID-19.

Emergency Paid Sick Leave Act

The new law provides two weeks of paid sick leave to all employees, regardless of how long they have been employed. Full-time employees are entitled to 80 hours of paid leave, and part-time employees are entitled to the average number of hours worked in a two-week period. The law also provides a method for calculating the amount of leave for employees with fluctuating work schedules.

Under the new law, sick leave must be paid at an employee's regular rate when the employee:

has been ordered to quarantine or isolate by the government;

has been advised by a health official to self-quarantine; or

the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.

The law caps sick leave paid at $511 per day—up to $5,110 total for each employee.

In addition to the permitted uses above, an employee may use paid sick leave, with payment at two-thirds of the employee's regular rate of pay, if the employee:

is caring for an individual under a quarantine or isolation order or to self-quarantine by a healthcare provider;

is caring for a child whose school or childcare has been closed or is unavailable; or

is experiencing any other substantially similar condition identified by the Secretary of Health and Human Services.

Under these circumstances, sick leave pay is capped at $200 per day—up to $2,000 total for each employee.

Employers cannot require employees to exhaust other forms of paid leave before using this COVID-19-related sick leave. The law also does not allow employers to require employees to use the COVID-19-related sick leave concurrently with any existing paid sick leave already offered by the employer.

The Secretary of Labor has been given the authority to (a) exempt employers with less than 50 employees if the required leave would jeopardize the viability of their business; and (b) exclude certain health care providers and emergency responders from the definition of employees entitled to take this paid sick leave.

Emergency Family and Medical Leave Expansion Act

In addition to providing paid sick leave, the new law extends FMLA protections and grants paid FMLA leave for the first time. If an employee is unable to work or telework because the employee needs to care for a child whose school or daycare has been closed, or whose childcare provider is unavailable due to COVID-19, the employer must provide:

10 days of unpaid leave to the employee; and

up to 10 weeks of paid leave at two-thirds the employee's regular rate of pay.

However, the employer is not required to pay more than $200 a day—up to $10,000 total.

During the first ten days of unpaid FMLA leave an employee may elect to use accrued vacation, personal, or other sick leave (including paid time newly available under the Emergency Paid Sick Leave Act). However, the employer cannot require the employee to use any of their accrued paid time off prior to taking this leave.

To qualify for this FMLA paid leave, the employee must have been on the employer's payroll for 30 days (as opposed to the normal FMLA requirement of 12 months).

Again, the Secretary of Labor has been given the authority to exempt businesses with fewer than 50 employees from these requirements and to exclude certain health care providers and emergency responders from the definition of employees entitled to take this paid FMLA leave. Under certain circumstances, employers with fewer than 25 employees are not required to reinstate an employee who uses the Emergency FMLA leave.

Tax Credits for Emergency Paid Sick and Family and Medical Leave

Employers providing paid sick leave or paid family leave under the new law are eligible for tax credits against the employer portion of Social Security taxes. Employers are entitled to a refundable tax credit equal to 100% of the qualified paid sick leave wages paid by the employer each quarter. Likewise, employers are entitled to a refundable tax credit equal to 100% of the qualified FMLA wages paid by the employer each quarter.

We Can Help

This new law goes into effect on April 2, 2020. In the meantime, Congress has indicated that it will be working on another phase of emergency COVID-19 legislation. Mason's Labor & Employment group is here to answer any questions you may have relating to new laws passed to address the COVID-19 pandemic.

]]>Thu, 19 Mar 2020 00:00:00 Zhttps://www.maslon.com/employer-update-federal-government-expected-to-pass-emergency-covid-19-legislation-to-provide-paid-leave-to-us-employees
This past weekend the House of Representatives overwhelmingly passed the Emergency Families First Coronavirus Response Act (H.R. 6201). The bill now heads to the Senate. The Trump administration has indicated its support for the legislation, with an interest in signing it into law on Tuesday, March 17, if passed by the Senate.

If passed as currently written, the bill has several requirements relating to paid leave for employees. Importantly, the leave provisions would only apply to employers with less than 500 employees. Here is a summary of the most pertinent provisions that would apply to these employers.

1. Emergency Family and Medical Leave Expansion Act

Under the House bill, employees will have the right to take up to 12 weeks of job-protected leave under the FMLA. The employee will need to be on the employer's payroll for 30 days to qualify (as opposed to 12 months, which the FMLA requires).

The first two weeks of leave may be unpaid, or an employee may choose to use accrued vacation, personal, or other sick leave. However, an employer may not require the employee to do so. After the two weeks of unpaid leave, an employer would pay the remaining FMLA leave (up to 10 weeks) at a rate of no less than two-thirds (2/3) of the employee's usual rate of pay.

The emergency FMLA leave may be used so an employee can:

Adhere to a requirement or recommendation to quarantine due to exposure to or symptoms of COVID-19;

Care for an at-risk family member who is adhering to a requirement or recommendation to quarantine due to exposure to or symptoms of COVID-19; or

Care for a child, if the child's school or place of care has been closed, or the childcare provider is unavailable, due to COVID-19.

The law will go into effect 15 days after it is enacted, and expire on December 31, 2020.

2. Emergency Paid Sick Leave Act

Separate from the emergency FMLA, under the House bill, employers will be required to provide employees with two weeks of paid sick leave, at their regular rate of pay, if they need to be quarantined or seek a diagnosis or preventative care for COVID-19. This bill applies to all employees, regardless of how long they have worked for their employer. In addition to providing two weeks of paid leave to all employees, the bill would provide pay for the first two unpaid weeks of leave that eligible employees have under the Emergency FMLA Expansion Act (discussed above) before being entitled to pay.

Full-time employees are entitled to 80 hours of paid leave, while part-time employees are entitled to the average number of hours that they work in a typical two-week period.

Further, the bill provides that:

This two weeks of paid leave may also be taken to care for (1) a family member who is quarantined or seeking a diagnosis or preventative care for COVID-19, or (2) to care for a child whose school has closed or if a childcare provider is unavailable, due to COVID-19, but in these instances, the required pay is two-thirds (2/3) of the employee's regular rate of pay, not full pay;

Employers post a notice informing employees of their right to paid leave; and

Employers comply with existing state or local paid leave entitlements. (See discussion below regarding Minneapolis, St. Paul, and Duluth's Sick and Safe Time Leave Ordinances).

This paid sick leave will go into effect 15 days after enactment, and will expire on December 31, 2020.

3. Emergency Unemployment Insurance Stabilization and Access Act

Another provision of the House bill would provide $1 billion in 2020 for emergency grants to states for processing and paying unemployment benefits. States would have immediate access to $500 million for administrative costs if they meet certain requirements, including requiring employers to provide employees notification of the availability of unemployment compensation at the time of an employee's separation.

4. Tax Credits for Emergency Paid Sick Leave and Family and Medical Leave

A tax credit equal to 100% of qualified family leave paid under the Emergency FMLA Expansion Act. However, the amount of family leave paid per employee is capped at $200 per day and $10,000 in total.

MINNESOTA LAWS TO KEEP IN MIND IN THE MIDST OF THE COVID-19 PANDEMIC

1. Minneapolis, St. Paul, and Duluth Sick and Safe Leave

Employees covered by the Minneapolis, St. Paul, and Duluth Sick and Safe Time Ordinances will be able to use their sick time for certain COVID-19-related absences. These ordinances cover absences caused by emergency closure of schools or place of care, or the need to care for a family member whose school or place of care has been closed by order of a public official to limit exposure to a public health emergency. The official order issued by Governor Walz on March 15 to close the schools will likely be considered the type of emergency closure triggering the obligation to pay sick leave in these cities.

2. Minnesota Law on the Isolation and Quarantine of Persons

Minn. Stat. § 144.4196 provides protection to employees in the event they are required to be isolated or quarantined. Under this law, an employer may not discharge, discipline, threaten, or penalize a qualified employee, or otherwise discriminate against the employee, because the employee has been in isolation or quarantine. Employers are cautioned not to treat employees who have been quarantined differently than other employees.

On February 19, 2020, new legislation was introduced in the Minnesota House relating to employees who are isolated or quarantined. The new legislation, if passed, would apply when a quarantine has been ordered by the commissioner of health, state, or federal government. If a quarantine is issued, an employee would need to be allowed to work from home, following an interactive process with the employer and if the arrangements are reasonable. This bill is not final, and has not moved forward since its introduction in February.

We Can Help

Please contact Maslon's Labor & Employment Group if you have questions or would like assistance reviewing your leave policies.

]]>Mon, 16 Mar 2020 00:00:00 Zhttps://www.maslon.com/covid-19-steps-employers-should-take-now
Given the current uncertainty of the reach of the Coronavirus (COVID-19), employers need to take steps now to protect the workplace. Although the Occupational Safety and Health Administration has not put forth specific standards covering COVID-19, employers need to consider their general duty under the Occupational Safety and Health Act (OSHA) to provide a safe and healthy workplace.

COVID-19: Workplace Considerations
At the state and federal levels, our public health officials are working to contain the spread of COVID-19. COVID-19 causes mild to severe respiratory illness with symptoms of fever, cough, and shortness of breath. Current scientific opinion is that COVID-19 is spread by contact with respiratory droplets from an infected person's nose and mouth. These droplets are emitted when an infected person exhales, coughs, or sneezes. Direct contact with these droplets transmits COVID-19. COVID-19 may also spread through contact with objects and surfaces contaminated with such droplets.

The situation is rapidly evolving and no one knows how severe the outbreak will be. Those working in the healthcare and travel sectors have elevated risks of exposure. Businesses are being encouraged to take immediate steps to conduct risk assessments and prepare for business disruptions.

Steps Employers Should Take Now

1. Minimize Risk of Transmission
The spread of COVID-19 may be prevented through the same steps taken to prevent the spread of the seasonal flu. The Centers for Disease Control and Prevention (CDC) recommends employers:

actively encourage sick employees to stay home;

have sick leave policies that are flexible and consistent with public health guidance;

separate employees with symptoms from other employees and send them home from work immediately;

stress respiratory etiquette and hand hygiene by all employees, including use of alcohol-based hand sanitizer if soap and water are unavailable;

routinely clean all frequently touched surfaces in the workplace; and

provide disposable wipes so that commonly used surfaces can be wiped down by employees before each use.

Further detail of the CDC's recommended strategies for minimizing the risk of transmission can be found at:

As the situation unfolds, employers should alter their strategies to minimize the risk of transmission.

3. Prepare for Application of Employer Policies to a COVID-19 Outbreak
COVID-19 has already resulted in many employers restricting work travel and modifying travel policies. A COVID-19 outbreak will necessarily bring into play policies relating to attendance, leaves, remote work, benefits, and payment practices.

The issues faced by employers could involve the legal requirements of such statutes as the FMLA, ADA, HIPAA, and FLSA. For example, if an employee needs to be quarantined due to the illness of a family member, the employer will need to assess whether the absence from work is covered by the FMLA or other leave laws. Any number of similar scenarios will arise, and employers should consider how they will address them in advance.

We Can Help
Please contact Maslon's Labor & Employment Group if you have questions or would like assistance reviewing your policies.

]]>Tue, 10 Mar 2020 00:00:00 Zhttps://www.maslon.com/melissa-muro-lamere-featured-in-twin-cities-diversity-in-practice-february-newsletter
Melissa Muro LaMere, partner in Maslon's Litigation and Labor & Employment Groups, is featured in the Twin Cities Diversity in Practice (TCDIP) February newsletter. The article highlights Melissa's impactful career, including her pivotal experience working with Senator Amy Klobuchar, finding community with the Minnesota Hispanic Bar Association, and her tireless efforts to advance diversity in the Twin Cities legal community.

"I found a new family within the Minnesota Hispanic Bar Association (MHBA). The organization creates an automatic connection among its members and the members of the other local affinity bars, as well as a platform for being your authentic self within the larger Twin Cities legal community," Melissa shared. "You need a place where you can be your authentic self, because that is the only way you can do your best work and be the kind of lawyer that is going places."

Melissa is an employment and business litigation attorney who enjoys working with clients to protect and grow their business in a competitive marketplace. She focuses her practice on the full spectrum of employment counseling and litigation matters in addition to business disputes involving non-competition and non-solicitation agreements, trade secrets, business contracts and torts, and unfair competition and trade practices.

Melissa has been selected as a 2020 40 Under 40 Honoree by the Minneapolis/St. Paul Business Journal, and she is recognized as a 2019 "Top Lawyer Under 40" by the Hispanic National Bar Association, an award recognizing lawyers who have demonstrated professional excellence, integrity, leadership, commitment to the Hispanic community, and dedication to improving the legal profession. She was also recognized as part of the 2019 "Diversity and Inclusion Awards" and as a 2017 "Up & Coming Attorney" by Minnesota Lawyer.

]]>Wed, 26 Feb 2020 00:00:00 Zhttps://www.maslon.com/are-you-ready-for-the-new-year-ensure-youre-compliant-with-the-new-flsa-minimum-salary-requirements-effective-january-1-2020
In September 2019, the U.S. Department of Labor (DOL) revised the minimum salary thresholds for the executive, administrative, and professional exemptions under the Fair Labor Standards Act (FLSA). The DOL estimates that 1.3 million workers will become eligible to earn overtime compensation under the final rule.

The final rule, which takes effect on January 1, 2020, implements the following key changes:

raises the total annual compensation level from $100,000 to $107,432 for the special rule that applies to "highly compensated employees"; and

allows employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the minimum salary level.

The final rule does not impact certain overtime exemptions such as the Motor Carrier Act exemption or the computer-professional exemption. However, any employer who has classified its employees under the executive, professional, or administrative exemptions, or the highly compensated employee exemption, should review their employee salaries to confirm that they are still high enough as of January 1, 2020, to be exempt from overtime under the FLSA.

Please contact Maslon's Labor & Employment Group for help to ensure compliance with these requirements.

]]>Wed, 18 Dec 2019 00:00:00 Zhttps://www.maslon.com/melissa-muro-lamere-appointed-to-hispanic-national-bar-associations-latina-commission
Maslon is pleased to announce that Melissa Muro LaMere, attorney in Maslon's Labor & Employment and Litigation Groups, has been appointed to the Hispanic National Bar Association's (HNBA) Latina Commission. Since 1972, the HNBA has worked to represent the interests of Hispanic legal professionals in the U.S.

As a member of the Latina Commission, Melissa will work to develop programs and strategies for Latina lawyers and students to overcome barriers to entry and advancement into the profession. As a part of the Commission, she will also help to inform and shape the policies and priorities that affect women lawyers and the legal culture in which they practice, creating forums for the exchange and expression of the views of Latina lawyers, and serve as a voice to advocate for these views.

Melissa is an employment and business litigation attorney who enjoys working with clients to protect and grow their business in a competitive marketplace. She focuses her practice on the full spectrum of employment counseling and litigation matters in addition to business disputes involving non-competition and non-solicitation agreements, trade secrets, business contracts and torts, and unfair competition and trade practices.

Melissa is dedicated to advancing diversity in the profession and the community. She serves on the board of the Minnesota Infinity Project, an organization focused on gender disparity on the bench throughout the Eighth Circuit, and she previously served on the board of the Minnesota Hispanic Bar Association, for which she also served as the co-chair of the Judicial Endorsements Committee. In 2019, Melissa was appointed by Governor Walz and Lieutenant Governor Flanagan to the Commission on Judicial Selection.

Melissa also maintains a robust pro bono practice, primarily serving as counsel to the American Civil Liberties Union of Minnesota in litigation involving individual constitutional rights and government transparency. She a member of Maslon's Diversity Committee, co-chair of Maslon's Diverse Attorney Resource Group, and is recognized as a 2019 "Top Lawyer Under 40" by the Hispanic National Bar Association.

]]>Wed, 20 Nov 2019 00:00:00 Zhttps://www.maslon.com/compliance-countdown-an-employers-guide-to-minnesotas-new-wage-theft-law
Minnesota has recently enacted what is being called the Wage Theft Law and set a tight timeline for employers to comply. The provisions of the law primarily relate to new disclosure and record-keeping requirements for new and existing employees, which go into effect on July 1, 2019. The law also creates the crime of "wage theft," effective August 1, 2019. To assist you, a summary of the most significant changes affecting Minnesota employers is provided below with links to key related documents provided by the Minnesota Department of Labor and Industry (DOLI).

CHANGES EFFECTIVE JULY 1, 2019:

Wage Notice

The new law amends Minnesota Statutes § 181.032 to require employers to provide employees with the following information at the start of employment (and to existing employees if and when the required information changes):

rate(s) of pay and the basis of that pay, including whether the employee is paid by the hour, shift, day, week, salary, piece, commission, or other method and the specific application of any additional rates;

allowances claimed for meals and lodging;

paid vacation time, sick time, or other PTO accruals and terms of use;

employee's employment status, including whether the employee is exempt and on what basis;

the list of deductions that may be made from the employee's pay;

the number of days in the pay period, the regularly scheduled payday, and the payday on which the employee will receive the first payment of wages earned;

the legal name of the employer and, if different, the operating name of the employer;

the physical address of the employer's main office or principal place of business and, if different, a mailing address; and

The wage notice must be given to the employee on their start date, and the employer must keep a signed copy. A wage notice must also be provided to existing employees the first time any information required on the wage notice changes for them (e.g., when their compensation changes). Once an employee has received their first wage notice, you must simply provide them with written notice of any change to the relevant information before it takes effect. These subsequent notices can be in any written form in the language requested by the employee, and they do not need to be signed.

the basis for rate(s) of pay, including whether the employee is paid by the hour, shift, day, week, salary, piece, commission, or other method;

allowances claimed for permitted meals and lodging;

the physical address of the employer's main office or principal place of business and a mailing address (if different); and

the telephone number of the employer.

Timing of Payment of Wages

Under the new law, all wages—including salary, earnings and gratuities, but not commissions—must be paid at least once every 31 days. All commissions earned by an employee must be paid at least once every 3 months.

KEY TAKEAWAY: If you have employees who earn commissions, make sure your policies clearly state when those commissions are "earned" for purposes of payment.

Additional Record-Keeping Requirements

Employers must also keep records of:

for employees paid on a piece rate basis, the number of pieces completed at each piece rate;

a list of the personnel policies provided to the employee, including the date the policies were given to the employee and a brief description of the policies; and

a signed copy of the wage notice discussed above.

These new record-keeping requirements apply to all employees, not just new employees. Records must be kept for a minimum of 3 years and available for inspection by the DOLI.

KEY TAKEAWAY: Employers should create or revise a policy acknowledgement form that satisfies the new law's requirements.

The new law also amends Minnesota Statutes § 609.52 to create the crime of "wage theft," which is punishable by fines and imprisonment. The crime of wage theft occurs when an employer does any of the following, with intent to defraud:

fails to pay an employee all wages, salary, gratuities, earnings, or commissions at the employee's rate(s) of pay or at the rate(s) required by law, whichever is greater.

directly or indirectly causes any employee to give a receipt for wages for an amount greater than what was actually paid to the employee for services rendered.

directly or indirectly demands or receives from any employee any rebate or refund from the wages owed the employee under contract of employment with the employer.

makes or attempts to make it appear in any manner that the wages paid to any employee were greater than the amount actually paid to the employee.

Employers found guilty of wage theft may be liable for a fine of up to $100,000 and can be imprisoned for up to 20 years, depending on the value of the stolen wages. The law allows for the amount of stolen wages to be aggregated over a six-month period.

OPPORTUNITY TO REVIEW EMPLOYEE CLASSIFICATIONS: In addition to ensuring employees receive their wages in full and on time, employers should take this opportunity to ensure they have properly classified their employees as either exempt or non-exempt.

Please contact Maslon's Labor & Employment group for help to ensure compliance with these requirements.

]]>Thu, 27 Jun 2019 00:00:00 Zhttps://www.maslon.com/maslon-welcomes-labor-employment-attorney-mary-knoblauch-to-the-firm
Maslon is pleased to announce the addition of Labor & Employment Attorney Mary Knoblauch to the law firm’s partnership. With more than 25 years of dedicated service to clients, her experience further strengthens Maslon's capabilities across a key area of practice.

Mary has built a reputation for providing clients with service-oriented, practical counsel and zealous representation across business and employment-related disputes—earned through more than two decades of dedicated work. Employers appreciate Mary's prompt counsel across a full range of employment and labor law issues. She is exceptionally adept at advising clients on matters involving discrimination laws, leave laws, drug testing, wage and hour law compliance, legal developments under the National Labor Relations Act, employment agreements, situations involving the discipline and discharge of an employee, and development of employee handbooks and personnel policies.

Mary is also a seasoned litigator with particular emphasis on non-competes, unfair competition, employment contract disputes, and employment discrimination. She works closely with her clients to strategize and reach their desired outcome. She is agile, responsive, and attuned to the concerns of clients spanning a broad range of industries, including medical device, healthcare, consumer goods, financial services, food processing, and manufacturing.

]]>Wed, 05 Jun 2019 00:00:00 Zhttps://www.maslon.com/stephanie-willing-to-present-at-minnesota-cles-2019-new-lawyer-experience-seminar
Stephanie Willing, member of Maslon's Litigation and Labor & Employment Groups, will present at Minnesota CLE's 2019 New Lawyer Experience seminar on January 17, 2019. During her session, titled "Using Negotiation and Settlement Skills to Your Tactical Advantage," Stephanie will discuss how negotiation and settlement skills are often a key component to a client's success. She will also give helpful tips and strategies designed to gain tactical leverage and maximize the client's position.

Stephanie regularly counsels clients on a variety of employment law issues, including hiring, disciplining, and terminating employees and wage and hour questions. She also advises employers on compliance with local drug testing laws (Minnesota's DATWA) and complying with medical marijuana laws. Additionally, Stephanie represents clients in employment disputes involving wage and hour violations, non-competes, wrongful discharge, and claims of discrimination. She has significant experience helping clients navigate through all stages of the litigation process and across many different forums, including federal and state courts, administrative actions, and privately arbitrated disputes.

]]>Thu, 17 Jan 2019 00:00:00 Zhttps://www.maslon.com/stephanie-willing-interviewed-by-ihennepin-lawyeri
Hennepin Lawyer]]>Stephanie Willing, a member of Maslon's Labor & Employment Group, was interviewed by Hennepin Lawyer in an article titled "Getting to Know Stephanie Willing, 2018-2019 New Lawyers Section Chair." In the feature, Stephanie shares information about her employment law practice, what she enjoys most about practicing law, what brought her to Minnesota from the west coast, and goals for the New Lawyers Section in 2019.

Stephaniecounsels clients regularly on a variety of employment law issues, including hiring, disciplining, and terminating employees as well as wage and hour questions. She helps clients navigate through all stages of the litigation process and across many different forums, including federal and state courts, administrative actions, and privately arbitrated disputes.

]]>Wed, 02 Jan 2019 00:00:00 Zhttps://www.maslon.com/maslon-welcomes-attorney-stephanie-willing-to-the-firm
Maslon LLP is pleased to announce the addition of attorney Stephanie Willing to the firm's Labor & Employment and Litigation groups. Her experience will further strengthen Maslon's capabilities in key areas of practice for our clients.

Stephanie concentrates her practice on a variety of employment law issues, including hiring, disciplining and terminating employees as well as wage and hour questions. She is well versed in compliance with local drug testing laws under the Minnesota DATWA and in complying with medical marijuana laws. Prior to joining Maslon, Stephanie practiced at a national labor and employment firm as well as a local boutique litigation firm. She graduated Order of the Coif from the University of Oregon School of Law and earned her Bachelor of Arts degree, magna cum laude, from the University of Southern California.

]]>Wed, 05 Dec 2018 00:00:00 Zhttps://www.maslon.com/social-media-policies-balancing-employer-needs-and-employee-rights-human-resource-law-boot-camp-national-business-institute-2018
Wed, 14 Nov 2018 00:00:00 Zhttps://www.maslon.com/drugs-and-alcohol-in-the-workplace-marijuana-and-other-considerations-human-resource-law-boot-camp-national-business-institute-2018
Wed, 14 Nov 2018 00:00:00 Zhttps://www.maslon.com/employee-relations-legal-solutions-for-sensitive-workplace-issues-human-resource-law-boot-camp-national-business-institute-2018
Wed, 14 Nov 2018 00:00:00 Zhttps://www.maslon.com/mari-kaluza-to-serve-on-panel-at-the-american-college-of-investment-counsel-2018-fall-annual-meeting-and-education-conference
Mari Kaluza, member of Maslon's Labor & Employment Group, will serve on a panel at the American College of Investment Counsel's 2018 Fall Annual Meeting and Education Conference on October 18 and 19, 2018. During her session, titled "Ethics: #MeToo," the panel will discuss the potential consequences—often unintended—for organizations dealing with #MeToo issues, as well as discuss current organization responses to the movement, both legally and publicly.

Mari counsels employers through many aspects of the employment relationship across a broad range of issues, including preparing employment agreements and policies. In addition, Mari represents employers in administrative proceedings as well as through various stages of litigation. To further assist her clients, she prepares articles and presentations for employers on a variety of employment-related topics, including wage and hour compliance, discrimination, harassment, leaves of absence, non-compete agreements, and significant changes or developments in the law